Daimler and Volvo link for fuel cell development

Two of the biggest names in truck-making, Daimler and Volvo, are aiming to form a 50-50 joint venture to explore fuel cells for heavy-duty vehicles.

The move is a decisive shift in favour of fuel cell technology at a time when electric propulsion’s future has been territory disputed with battery power proponents.

Still at an early stage, it so far involves Daimler Truck and the Volvo Group signing a preliminary non-binding agreement to establish the JV.

Their intention is to develop, produce and commercialise fuel cell systems for heavy-duty vehicle applications and other uses.

Daimler aims to consolidate all its current fuel cell activities in the joint venture.

The Volvo Group would then acquire 50 per cent in the joint venture for about Euro600 million (A$1.03 billion) "on a cash and debt free basis".

"Truly CO2-neutral transport can be accomplished through electric drive trains with energy coming either from batteries or by converting hydrogen on board into electricity," Daimler Truck chairman Martin Daum says.

"For trucks to cope with heavy loads and long distances, fuel cells are one important answer and a technology where Daimler has built up significant expertise through its Mercedes-Benz fuel cell unit over the last two decades.

It has been a busy and surprising past five months for Volvo Trucks globally on the cooperation front, with the group having formed a strategic alliance with Isuzu in December which sees UD go to the Japanese company.

The latest move dovetails with the European Union’s European Green Deal initiative towards carbon neutrality by 2050, announced last December.

That occurred a matter of weeks after Daimler Trucks & Buses nominated 2039 for its CO2-neutral driving operations in major northern hemisphere markets.

"Electrification of road transport is a key element in delivering the so called Green Deal, a carbon neutral Europe and ultimately a carbon neutral world," Volvo Group president and CEO Martin Lundstedt says.

"Using hydrogen as a carrier of green electricity to power electric trucks in long-haul operations is one important part of the puzzle, and a complement to battery electric vehicles and renewable fuels.

"Combining the Volvo Group and Daimler’s experience in this area to accelerate the rate of development is good both for our customers and for society as a whole.

"By forming this joint venture, we are clearly showing that we believe in hydrogen fuel cells for commercial vehicles. But for this vision to become reality, other companies and institutions also need to support and contribute to this development, not least in order to establish the fuel infrastructure needed."

The joint venture is to operate as an independent and autonomous entity, with Daimler Truck and the Volvo Group continuing to be competitors in all other areas of business.

The joint venture is to operate as an independent and autonomous entity, with Daimler Truck and the Volvo Group continuing to be competitors in all other areas of business.

"Joining forces will decrease development costs for both companies and accelerate the market introduction of fuel cell systems in products used for heavy-duty transport and demanding long-haul applications. In the context of the current economic downturn cooperation has become even more necessary in order to meet the Green Deal objectives within a feasible time-frame," the companies say.

"The common goal is for both companies to offer heavy-duty vehicles with fuel cells for demanding long-haul applications in series production in the second half of the decade.

"In addition, other automotive and non-automotive use cases are also part of the new joint venture’s scope."

Daimler Trucks aims to bring together all group-wide fuel cell activities in a new Daimler Truck fuel cell unit.

Part of this bundling of activities is the allocation of the operations Mercedes-Benz Fuel Cell GmbH, which has long-standing experience in the development of fuel cell and hydrogen storage systems for various vehicle applications, to Daimler Truck AG.

The joint venture will include the operations in Germany’s Nabern, currently headquarters of the Mercedes-Benz Fuel Cell GmbH, with production facilities in Germany and Canada.

The signed preliminary agreement is non-binding.

A final agreement is expected by the third quarter of the year and closing before year-end.